MEXCSequoia Capital Exec Shines Light On Due Diligence On FTX Investment
According to partner Alfred Lin on Thursday, Sequoia Capital has reduced management fees in its two most recent venture funds as it prepares for a slower investing climate.
Limited partners contributed money to Sequoia’s crypto and ecosystem funds, which were launched early in 2022. Now they are able to pay management fees based on the capital deployed rather than the standard model of capital under management. The changes in fee structure were announced to investors in December.
How much is Sequoia investing?
In addition to a 600 million USD crypto fund to invest in crypto businesses and tokens, the firm unveiled a 950 million USD ecosystem fund. This is to support scouts and funds established by Sequoia alumni. According to Lin, 10% of the crypto fund has already been used.
The world’s largest venture investor made an uncommon concession with this decision after U.S. venture capital agreements decreased by 31% from their peak in 2021. The sharp decline in internet company valuations and the consequences for Sequoia’s portfolio business FTX have put the firm’s long-standing relationships with Limited Partners to the test.
Also read: Tyler Winklevoss Calls SEC Lawsuit Against Gemini Politically Motivated
Did the VC firm follow the due diligence on FTX?
According to reports, the SEC has inquired about several investors in FTX’s due diligence procedures.
Speaking at the StrictlyVC event on Thursday, Lin said that a thorough investigation and due diligence had been done on FTX, through internal processes that had been started. Lin claimed that they were misled in a number of circumstances.
Sequoia Capital reduced its investment in FTX by 150 million USD from its third Global Growth Fund. Also, by 63.5 million USD from its crossover fund, bringing the total amount invested in FTX and FTX US to zero.
The company will still invest in crypto.
“We will invest even during a slower period, but we also won’t stop growing. We are optimistic about the future of cryptocurrency and a number of other industries,” added Lin.
Also read: Court Allows FTX To Sell Japanese, European Subsidiaries
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Related Articles
- Ripple Secures $500M Funding Led by Fortress and Citadel Securities After Record Growth
- Teucrium ETFs CEO Says Late November Will Be ‘Big’ For XRP At Swell 2025
- MetaPlanet Raises $100M to Resume Bitcoin Treasury Purchases After One Month Pause
- Crypto Market Bloodbath: 3 Key Signs That Could Signal a Recovery
- XRP Chosen to Back first WeatherCoin Launch amid VivoPower and K-Weather Partnership
- Changpeng Zhao Sparks Bull Run Aster Price Jumps 10%, Eyes $2 Breakout
- Whales Scoop 323,523 ETH Amid Price Dip – Is Ethereum Price Correction Setting Up a 10K Wave?
- How Solana, XRP, and Cardano Reacting as U.S. Shutdown Becomes Longest in History
- Dogecoin Price Risks 20% Crash as Death Cross Aligns With Falling DOGE ETF Inflows
- Will Bitcoin Price Recover When US Govt. Opens? On-chain Data Shows Recovery Might Take a While
- XRP Price Forecast as Price Nears a Death Cross Formation- Is a Crash Below $2 Inevitable?
